AUTUMN//WINTER 2018 47 46 AUTUMN//WINTER 2018 STATIONERY BIZ “COLLAPSE of the high street signals a looming crisis.” This is merely one of myriad, somewhat hysterical headlines over the last few months describing the death of the British high street and the demise of retail as we know it. At Stationery Show London 2018, I described some of the underlying data as well as highlighting some stories that point to success in the stationery market, despite this constant reporting of doom and gloom. The big picture is that growth is broadly flat (non-food like-for-like sales in the three months to June were +0.8 per cent year on year, according to the BRC). Whilst there has been a lot of discussion regarding vacancy rates, which rose through 2017, these are not currently back to the highs experienced in 2013, although there has been some redistribution of retailers away from shopping malls and towards retail parks. With high- profile administrations from the likes of Poundworld and Maplin and now House of Fraser, and CVAs from household names such as Mothercare and ongoing economic uncertainty, it is fair to say that there are challenges and many retailers are facing tough decisions around costs across the board. However, in the words of retail expert Steve Dennis: “Physical retail is not dead, boring retail is.” It is far too simplistic to say online retail is “killing” the high street. Yes, customers can now compare prices at the click of a button and they are becoming ever more demanding around experience (through any channel). But digging deeper into the stories behind these struggling or failing retail brands often shows a lack of clear market positioning and insufficient product innovation, as well as historic underinvestment in stores and service. Alex Schlagman, founder of industry-wide movement SaveTheHigh, is passionate about supporting retailers’ sustainable success in the face of macro challenges to rents, rates and consumer confidence. He believes that “we can make sure that businesses are empowered to take advantage of all the current innovation, including opportunities through marketplaces, location-based advertising and use of local influencers getting people into store.” All of these strategies and more are utilised by some of the current success stories within UK stationery retail. Whilst market performance data is hard to come by, a glance around Britain’s high streets demonstrates that space given over to stationery has been shifting significantly in recent years. Smiggle (see pages 52-53) is continuing with its rapid roll out, having launched over 125 stores since arriving in the UK just five years ago, and other Australian imports Typo and kikki.K are also adding stores and wholesale accounts respectively. Card Factory has seen non-cards (which includes a significant stationery and gift offering) outperform, with sales up 10 per cent for the year to January 2018. It is telling that WHSmith, whilst delivering disappointing results overall, is another retailer adding space to stationery and investing in both product and store design. CEO Steve Clarke publicly states: “Stationery is the most attractive [category] and has the highest margins…. It is key to our strategy.” Notably, for WHSmith’s high street stores, stationery revenue has grown year on year and contributed 60 per cent of the stores’ profits from 50 per cent of sales in the year to February 2018, highlighting the profit impact relative to other categories. Clarke adds: “Stationery has continued to be the main beneficiary of space with more stores benefitting from additional space towards the front of store and further range improvements.” The Reading branch of WHSmith is one to have received a fully refurbished stationery concept and Clarke highlights its subsequent success. “In our Reading store, we have seen a strong performance across stationery and cards with fashion stationery and Apple accessories proving particularly popular. Our extended art and pen departments have also proven to be very successful… We extended the trial [of the new concept] to a further five stores ... We will closely monitor the results of these additional trial stores and, at the same time, develop a trial for smaller stores.” In further investments illustrating their focus on this category, WHSmith also acquired online specialist pen retailer in January, describing this as “part of our strategy of growing the stationery category. will complement both our existing high street stores and stationery ranges and customer offer.” The high margins discussed by Clarke are also attractive to lifestyle and fashion retailers, with the likes of Oliver Bonas, Anthropologie, & Other Stories, Asos, numerous independent stores and garden centres adding stationery products to their ranges. One-off specialists such as Quill London and Papersmiths appear to be growing in popularity, with Papersmiths expanding to Brighton and a store opening in Chelsea in late September. So as a stationery brand or retailer, what can you do to take advantage of this apparently buoyant market? Firstly, a relentless focus on product. Customers’ tastes are evolving, with some trends running for multiple seasons with additions or developments, such as metallic – where rose gold was extremely popular last year, we are now seeing more brass and iridescence as well as over-the-top sparkle and sequins. Delivering new, innovative products each year and aligning with wider fashion and interiors trends will set you apart from the competition. Secondly, ensuring that product is backed up with fantastic store experience; this is often an area where independents and small chains can differentiate easily. Schlagman notes: “The shopkeepers that are doing well locally are going above and beyond on service. The human connection in a physical space can give customers the ‘wow factor’ – building an emotional connection that means they go from liking you to loving you.” Thirdly, the current market volatility gives opportunities for retailers that are willing to take calculated risks some unprecedented opportunities to test and learn. Scribbler, for example, has added several stores in 2018, taking advantage of newly vacant shopfronts in prime footfall locations such as Bond Street station and Bishopsgate in London. The opportunities in pop- up shops remain exciting, with the ‘airbnb of retail space’ Appear Here currently listing over 500 retail spaces in the UK. Finally, retailers should think beyond channels and ensure that their digital and physical offerings are complementary. “As consumers we’re both online and offline – we often research online and buy in store, and vice versa,” explains Schlagman. “Proactively using online tools such as Facebook advertising or Google’s local search results will make sure you’re discoverable and help engage local customers. The current high street winners are being really proactive about using online channels to drive footfall in store.” Utilising these techniques along with a focus on the retail fundamentals of product, price and brand and excellent visual merchandising (online and offline) should help smaller retailers and brands set themselves up for success in this creative, dynamic and fast-moving market. I hope to be sharing more of your success stories next year! THE STATE OF STATIONERY WHSmith travel store Alex Schlagman,founder of Steve Clarke,CEO ofWHSmith Is stationery a casualty of high street decline? Far from it, says retail analyst REBECCA SAUNDERS in her appraisal of businesses bucking the trend.